China Is Finally Making Progress On The China-Kyrgyzstan-Uzbekistan Railway – Analysis
By Published by the Foreign Policy Research Institute
By Niva Yau Tsz Yan*
China has struggled to gain support from its Central Asian neighbors to build the China-Kyrgyzstan-Uzbekistan (CKU) railway since the 1990s.
The CKU railway is crucial to China for two interconnected purposes—to advance its geopolitical interests and to secure favorable relations with Central Asian elites for their support over Chinese legitimacy in Xinjiang (East Turkestan).
Originally signed in 1997 with Kyrgyzstan and Uzbekistan, the CKU railway came alongside China’s own Great Western Development Strategy, a domestic initiative officially announced in 1999 (though many of its infrastructure projects had already begun several years prior). This was aimed at bringing resources located in its Western territories to China’s economic heartland on the East coast. Central Asia, including Xinjiang (East Turkestan), hold the vastest concentration of carbon resources and minerals in the Chinese Western neighborhood.
At the same time, in the 1990s, China had to build ties with these newly independent Central Asian states from scratch. Rested on economic incentives, China made repeated promises of “reviving the ancient Silk Road” in exchange for Central Asian non-support over the Uyghur political movement, a key element in legitimizing Chinese rule in Xinjiang.
China first built its railway reaching the two cities near the Kyrgyz border, Aksu and Kashgar, in 1998 and 2003. The 2000s was a decade where several key Chinese energy and infrastructure projects in Central Asia also took shape. The Chinese oil pipeline from Kazakhstan started operation in 2010, and the gas pipeline from Turkmenistan was completed in 2009. Needless to say, the construction of the CKU railway, its Kyrgyz and Uzbek sections, was gaining momentum, along with a regional perspective that viewed China as the new economic provider.
However, despite the rapid growth of bilateral trade between China and Kyrgyzstan in the 2000s, from $118 million in 2001to $5.2 billion in 2009 (mainly as a result of the Kyrgyz import-export sector trading Chinese commodity products elsewhere in the former Soviet Union), both sides struggled to agree on a financing method for the $2 billion railway.
Since the early 2000s, a number of feasibility studies on the CKU railway have been conducted by the Chinese side, and by the Kyrgyz side with assistance from international organizations such as the European Union and the World Bank.
China, however, made one serious mistake. Rather than providing investments, Beijing lobbied for ownership of several Kyrgyz mining sites in exchange for building the Kyrgyz section. The mining sites wanted by the Chinese side include Zhetim Too, the world’s second-largest iron ore reserve, which is estimated to be worth at least $50 billion, according to current Kyrgyz President Sadyr Japarov. The site, a stone’s throw away from the Chinese-Kyrgyz border, is also right at the bottom of a large glacier and key water source that feeds the Kyrgyz agricultural sector, and thus has been exposed to environmental opposition for fear of contamination.
The Kyrgyz government has opposed the trade of state resources for the CKU railway since the beginning. Yet, year by year, to every Kyrgyz head of state that steps into power, the Chinese side insists the importance of the CKU railway to bilateral relations while being unable to bring forward favorable financing terms to the Kyrgyz side.
Aside from significant financial disagreements, China also failed to address various opposition views held by the Kyrgyz side, thereby unable to push along concrete developments for the CKU railway.
Firstly, popular opinion amongst Kyrgyz elites seems to be that the CKU railway is not profitable at all for Kyrgyzstan. Because of this, a popular view holds that the Kyrgyz side should not be made to pay for the construction, but can allocate shares to foreign ownerships, who will invest and build this railway.
Secondly, even when the railway starts operations, Kyrgyz elites will also worry about competition, and Kazakhstan couldreduce its own transit fees to make two of its China-Kazakhstan routes more attractive. However, in light of Russia’s war in Ukraine, the profitability calculation of the CKU railway has changed. New developments have led to a significant rise in demand for cargo routes bypassing Russia.
Lastly, the most worrying issue amongst the Kyrgyz public is the perception of the CKU railway as an instrument of Chinese expansion. The arrival of economic projects in Kyrgyzstan have introduced a large number of locally unwanted Chinese workers, and there is a strong fear that the construction of this railway on its own will bring more Chinese migrants, and facilitate future migration due to easier access to Kyrgyzstan.
The Kyrgyz public, over time, has grown more and more suspicious of the railway, viewing it as a useless piece of infrastructure that allows China to intrude upon its sovereignty. This suspicion reached its peak in 2020 when Kyrgyz external debt to China climbed to $1.7 billion, approximately half of the country’s total external debt. In the same year, locals protested a $275 million China-funded logistics hub on the Kyrgyz side of the Chinese-Kyrgyz border.
While it has proved nearly impossible for China to push the CKU railway on its own, a changed regional environment has led other actors to step in and support the project. For the first time, in 2017, Uzbekistan sent railway experts to Kyrgyzstan to discuss the CKU railway. Then, in 2019, Uzbekistan invited Turkey to jointly support the Kyrgyz section of the railway.
While Uzbekistan has been largely absent in the process of pushing for the CKU railway from the 1990s to the 2010s, new leadership in Tashkent redirected Uzbek foreign policy away from isolationism. It appears that the Chinese side has taken advantage of Uzbekistan’s proactiveness. In 2022, a Chinese press release claimed that “Uzbekistan was the first country to suggest China-Kyrgyzstan-Uzbekistan railway.”
For the time being, with the participation of Uzbekistan, the financing of the CKU has been preliminary agreed upon. All three sides will contribute equal investments toward the Kyrgyz section of the CKU railway. However, many practical issues are not yet resolved, particularly those of public concern in Kyrgyzstan. The number of Chinese workers expected to arrive and stay, vocational training for local railway engineers, investment for industrial projects along the railway, and an increasing number of permits for Kyrgyz products to enter China are issues crucial for operational sustainability.
The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.
*About the author: Niva Yau is a Fellow in the Eurasia Program. She is a Senior Researcher at the OSCE Academy in Bishkek and a graduate from the University of Hong Kong.
Source: This article was published by FPRI